Health and Indigenous Affairs Correspondent

Standing firm: Australian Ethical has put the pressure on Norwegian company TOMRA to stop selling tobacco sorting machines.

An Australian superannuation and investment fund is leading an international effort to pressure a Norwegian machinery maker to leave the tobacco industry.

In what amounts to a new front in the war against tobacco, Australian Ethical will put forward a resolution on Monday at the annual general meeting of Norwegian company TOMRA, demanding it stop selling tobacco sorting machines.

Australian Ethical, which manages more than $600 million on behalf of about 18,000 investors, has long invested in TOMRA, which makes machinery used in recycling.

Last year, when TOMRA bought a company that makes tobacco sorting machines, Australian Ethical wrote to the company, asking it to get out of the area. When it refused, Australian Ethical approached other investors in the company for support.

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''We've got a very strong position on tobacco,'' Australian Ethical managing director Phil Vernon said. ''Any exposure to tobacco we treat pretty seriously.''

The resolution calls on the company to stop selling tobacco sorting machines to the tobacco industry within six months. Australian Ethical focused its lobbying efforts on TOMRA's top 20 shareholders, and has received two strong indications of support, and informal assurances from other investors. While some investors were not aware of TOMRA's exposure to tobacco and were alarmed, others were not concerned, either because they do not screen out tobacco, or they were not worried by the size of the tobacco business, which provides about 3 per cent of TOMRA's revenue.

''To be honest, we're probably realistic about whether the resolution will succeed but we're hopeful obviously that it will,'' Mr Vernon said.

''At the very least, what we're interested in is sending a fairly strong message to the company.''

Mr Vernon said if the resolution received majority support, it would be binding on the company. If it fails, Australian Ethical will sell its stake in TOMRA.

In February the Future Fund announced it would sell its tobacco investments - valued then at about $222 million - citing the damaging health effects and addictive properties of tobacco.

Superannuation funds including HESTA, UniSuper and First State Super have previously dumped their investments in tobacco.